To consider a report by County Councillor Wynne Jones, Portfolio Holder for Finance.
Minutes:
Finance Scrutiny Panel report on the Budget
Before the Cabinet considered the agenda item the Chair of the Finance Scrutiny Panel presented the Panel’s report on the budget proposals for 2017/18. He reported the Panel’s concerns over the substantial draw on reserves and that some services seemed to be moving from cash limited to demand led budgets. The Panel wanted to see the base budget review in Adult Services to be rolled out to all directorates. The Panel was also concerned that levels of Council Tax did not reflect average income in the county and that council tax base in Powys was one of the highest in Wales meaning it made a significant contribution to the overall funding.
The Cabinet noted the Panel’s comments, but did not accept their conclusion that untested proposals should not be put forward for consultation arguing that it was important to take account of representations made. The Leader and Portfolio Holder for Finance thanked the Finance Scrutiny Panel for their work.
RESOLVED that the report of the Finance Scrutiny Panel be noted.
Cabinet then considered the budget for 2017 - 2018, the medium term financial strategy for 2017 - 2020 and the capital programme for 2017 – 2021 (copy filed with the signed minutes).
The Portfolio Holder for Finance explained the approach taken by the Cabinet in seeking to present a balanced budget. The budget had been set in the midst of ongoing austerity with the funding received from Welsh Government reduced by 0.5%. Welsh Government funding made up 70.6% of the council’s net expenditure, with additional specific grants. The remaining net expenditure was funded by Council Tax,and a 4.5% increase in Council Tax would be recommended to Council. The budget included provision for investment and service pressures of £13.621m and in order to produce a balanced budget savings of £9.636m and other strategies had been identified and included in the plan. The savings proposed were backed by impact assessments and it was confirmed that each was considered by a panel of Cabinet members. Those that had identified risks had to include mitigation measures before they were signed off by the panel.
The proposals included a net increase in the revenue base funding for Adult Social Care of £3.378m. This represented a 6% increase in net budget. In addition a specific reserve of £2.75m would be set aside and Cabinet has received advice from the S151 Officer on this issue, but the reserve would only be accessible through a virement process, with demonstrable evidence of need and supporting business case and subject to the following criteria:
1. The use of the reserve can only be agreed as part of a report to formal cabinet. This can be part of the budget monitoring report so long as there is a clear separate recommendation. Depending on the amount it may also need to go to the following Council Meeting for agreement under the terms of the constitution.
2. Any draw down of the reserve will need to have a business case demonstrating why the funds are needed and why the requirement cannot be met by management action to address the one off pressure or overspend. The business case will have to be signed off by the S151 Officer before it goes to Cabinet.
3. The reserve will be reviewed annually as part of the budget process. This will assess whether the amount is appropriate. If the reserve is no longer required (or reduced) the amount will return to the general fund unless otherwise proposed by the Cabinet as part of the budget policy.
4. Any use of the reserve will not automatically lead to an increase in the service’s base budget the following year. In other words the service will first have to explore options to meet the funding that has been drawn down in future years. By doing so the reserve in effect becomes a means of ‘smoothing’ pressure between financial years.
The proposals also included additional £1m funding for schools for allocation via the formula, an additional £800k for out of county placements and £200k plus £300k from the budget management reserve to fund the gap from the non-closure of household waste recycling centres for one year. The MTFS also included an additional £1m for schools per annum for its three years, a proposed investment of £6m over its lifetime to increase standards.
RECOMMENDED to Council |
Reason for Recommendation: |
1. That the Medium Term Financial Strategy for 2017 to 2020 as set out in Appendix 1 to the report be agreed in principle. |
To aid business planning and development of the budget over a three year period |
2. That the proposed Revenue Budget for 2017/18 shown in the Financial Resource Model in Appendix 2 is accepted and recommended to full Council on the 23rd February 2017. |
Statutory Requirement |
3. The proposed Capital Strategy for 2017/18 shown in Appendix 4 is accepted and recommended to Full Council on 23rd February 2017. |
Statutory Requirement |
4. That a Council Tax increase of 4.50% is included in the budget that goes to full council on the 23rd February 2017. |
There is a Statutory Requirement to set Council Tax but the level is a matter for local determination. |
5. The authorised borrowing limit for 2017/18 as required under section 3(1) of the Local Government Act 2003 be approved at £452.7m as set out in paragraph 9.9 of the report. |
Statutory Requirement |
6. The Prudential Indicators for 2017/18 are approved as set out in section 9 of the report and Appendix 5. |
Statutory Requirement |
County Councillor EA Jones did not vote having missed part of the debate.
Supporting documents: